Bharti Airtel's Profits Down, Revenue Growth Flat

India's largest mobile operator, Bharti Airtel, reported a decline in profits and flat growth in revenue for the quarter ended March 31, even though its customer base grew 35 percent over the same quarter last year.

Bharti and other Indian mobile operators are affected by a tariff war which has pushed voice rates at times to below 0.01 Indian rupees (US$0.0002) per second. Voice calls were earlier charged by the minute. As urban markets are getting saturated, operators like Bharti Airtel are also expanding in rural markets where margins are low, analysts said.

Bharti Airtel reported that for the quarter ended March 31, its revenue grew by 2 percent to 100.6 billion rupees by U.S. accounting rules, in comparison to the same quarter last year. Its profits for the quarter were 20.6 billion rupees, down by 8 percent from last year. The company added 8.8 million new customers in the quarter.

The company's average revenue per user (ARPU) for mobile services was down to 220 rupees in the quarter, down by 28 percent from 305 rupees in the same quarter last year. Average minutes of use per user were also down.

The company also reported that revenue for its fiscal year ended March 31 was 396 billion rupees, up by 7 percent from last year. Profits were also up 7 percent to 91 billion rupees.

Bharti Airtel had about 127.6 million mobile customers at the end of the quarter, up by 36 percent from 93.9 million customers in the same quarter last year. Its total customer base, which includes users of its broadband Internet, digital TV and fixed telephony services, was 130.6 million at the end of the quarter.

The company has meanwhile been expanding outside the country. It signed an agreement in March to acquire Zain Africa for an enterprise value of US$10.7 billion. Zain Africa has operations in 15 countries, and a total subscriber base of 42 million. Bharti Airtel already has operations in Sri Lanka, and has acquired a majority stake in Warid Telecom, the fourth largest operator in Bangladesh. Bharti Airtel is also bidding for 3G licenses in India.

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